China appears to relax North Korea sanctions: report to U.S. Congress

WASHINGTON (Reuters) - A U.S. congressional commission said on Wednesday that China appears to have relaxed enforcement of sanctions on North Korea and called on the Treasury Department to provide a report on Chinese compliance within 180 days.

FILE PHOTO: North Korea's leader Kim Jong Un listens to U.S. President Donald Trump as they meet in a one-on-one bilateral session at the start of their summit at the Capella Hotel on the resort island of Sentosa, Singapore June 12, 2018. REUTERS/Jonathan Ernst

In its annual report, the U.S.-China Economic and Security Review Commission said the Treasury report should include a classified list of Chinese financial institutions, businesses, and officials involved in trading with North Korea that could be subject to future sanctions.

The bipartisan commission said China had appeared to enforce sanctions on North Korea more thoroughly than in the past in 2017 and in early 2018.

But this effort appeared to have relaxed since a thaw in relations between China and North Korea as the long-time ally of Beijing began to engage with the United States this year.

“China appears to have eased off sanctions enforcement, despite its promises to keep sanctions intact until North Korea gets rid of its nuclear weapons,” the report said.

“North Korean workers have returned to jobs in northeast China, economic activity and tourism have picked up in border towns, flights in both directions have resumed, and the two countries have conducted high-profile official exchanges to discuss economic development,” it said.

It said China always left “key lifelines” in place for North Korea and there were “holes” in enforcement that included “ship to ship” transfers of goods.The report said the Treasury Department, in recommending Chinese sanctions targets, should also “explain the potential broader impacts of sanctioning those entities.”

The United Nations Security Council has unanimously boosted sanctions on North Korea since 2006 in a bid to choke off funding for its weapons programs. The United States has imposed sanctions in the past on Chinese and other foreign firms for violating those steps.

China and Russia have said the Security Council should reward Pyongyang for “positive developments” after U.S. President Donald Trump and North Korean leader Kim Jong Un met in June and Kim pledged to work toward denuclearization.

China’s top diplomat and politburo member Yang Jiechi said after talks in Washington last week that China would “continue to enforce strictly relevant U.N. Security Council resolutions.”

Trump has suggested China may be exerting negative pressure on U.S. efforts to press North Korea to denuclearize in response to U.S. trade measures on Beijing.

The U.S. Treasury did not immediately respond to a request for comment on the commission report, but the State Department said it expected all U.N. states to implement sanctions resolutions until North Korea gave up its nuclear weapons.